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Erick and Rich talk about the growing need for virtual Chief AI Officers and what it means for an MSP to be one, plus tips on selling cybersecurity services without actually selling. Then they’re joined by Joel Abramson and Mark Scott of Top Down Ventures for a venture capital investor’s take on today’s managed services market. And finally, one last thing: the gritty tale of a woman who spent three weeks digging in the dirt for an engagement ring diamond, and found one.
Discussed in this episode:
The Top Down LinkedIn Newsletter
A New York woman dug for 3 weeks to find her own engagement ring diamond
Transcript:
Rich: [00:00:00] And 3, 2, 1. Blastoff, ladies and gentlemen, welcome in another episode of the MSP Chat podcast, your weekly visit with two talking heads, talking with you about the services, strategies, and success tips you need to make it big in managed services. My name is Rich Freeman. I’m chief analyst channel, Mastered of the organization responsible for the show.
I’m joined as I am every week by your other co-host, our CEO and chief strategist at channel mastered Erick Simpson. Erick,
Erick: how are you? I’m doing well, rich. I recharged over the holiday weekend. We’re just coming off of the holiday weekend as we record this, and so I’m plugged back in and re-energized.
How about you?
Rich: That very similar story. And I will say, you, [00:01:00] you never quite know what to expect on any holiday weekend here in my lovely long town of Seattle. But the weather more os cooperated and it was very nice. I took some serious time off and recharged too, and I’m feeling good.
Erick: Awesome. Yeah. Ready to rock and roll. Awesome.
Rich: Let’s do some rock and rolling right here as we dive into our story of the week. It’s gonna take me just a minute to get there, but stick with me folks. You’re gonna see where I’m going soon enough. I have written before about the virtual Chief Information Security officer, the vcso role.
There are a lot of MSPs who are saying that they’re a vcso. I’ve spent enough time interviewing legit, full-time professional, VC sos to know that most MSPs who say they aren’t necessarily because knowing security really thoroughly isn’t the core or the only requirement for being a vc.
You’ve also gotta be able to go into the boardroom with C-level executives, or they’re equivalent in a smaller organization and have a business conversation with them about [00:02:00] security and successfully persuade them to make the investments that you know, that they need to make. And that there’s business skill there.
That’s communication skill. And that’s a different skill set than a lot of MSPs possess. Okay. Hang on to that. A few weeks ago, as I was at the twenties annual conference vision in Dallas. That’s where we interviewed Jane McBain and Ranya Sukar from Kase. John Powella, the president and CEO of Enable was on stage during that event.
And at one point he was talking about how we’re seeing more and more MSPs and not necessarily giant ones, selling into mid-market organizations and enterprise organizations and learning, needing to learn as they go. How to have a, not just a business con conversation or a consulting conversation.
We’ve talked about that before, but a business conversation with a CIO, a business conversation with A CFO, with a CMO, with a CRO, with a c to get that sort of specific role, specific inflection, understand what the CFO [00:03:00] cares about and know how to communicate with them about what you can do for them in a way that will resonate with them.
That’s an executive level kind of communication skill that a lot of MSPs are learning now. Last week along comes a research study by Mann which is a very well known, respected cybersecurity analyst organization. It was sponsored by and published by OpenText, but a lot of very interesting information in there.
Here are a few data points that caught my eye. So 50, they went out. This is a global survey of senior IT and security executives. So our people, 57% of them said that AI initiatives have a very or very high priority, a high or very high priority. Not a surprise there.
They also said in the survey, CEOs, CIOs, and CISOs are most likely to have authority for setting AI strategy. Makes sense at an organization that views AI strategically and has people in those roles. And [00:04:00] 55% said their CEOs and boards consider the use of AI in it and security very are extremely important.
Okay. Businesses are invested in ai, very senior C-level people are making the decisions there. On the other hand, we learned from this survey that just 47% of the IT and security people OpenText and Parliament surveyed, said that their goals are in alignment with the people who are actually responsible for the AI initiatives.
In other words, the people who understand the technology best and are drawing up plans don’t necessarily feel like they’re in alignment with the people who are actually making the decisions. And this is where I’ve been going all along, Erick, 50% of the people surveyed by OpenText and Pan and said that their organization has hired or is thinking of hiring a chief AI officer or perhaps a Chief Digital Officer to lead AI strategy.
And so we come back, we started with V cso. [00:05:00] What about v? Virtual Chief AI Officer. Now, this is a concept we’ve discussed before on the show. Once upon a time we had Wes McDonald, who’s a truly leading edge AI consultant to to MSPs. He joined us on the show and we were getting into that idea of an MSP being a virtual chief AI officer to their clients with him.
But as I put together some of these puzzle pieces from the last two, three weeks Erick, I can really see that opportunity opening up for the MSP who understands that there are, the decisions are being made by people in these specific C-level roles. They care about different things.
They communicate in different ways. If you are the person who, like a VC cell, both understands the technology and knows how to have that boardroom conversation with the decision makers on it. You’re gonna be in a really good position, a competitive position, and then a position once you get some traction with that customer and show them [00:06:00] some results to be that sticky AI consultant for a very long time.
Erick: Yeah. Rich, this is it’s a phenomenon that we see kind of two sides of the channel having debates about, right? AI is this, super awesome opportunity, and others are thinking, okay this might be a bubble. Let’s be careful, wait and see. But this the results of this survey kind of align with some data that Jay McBain also shared recently at PAX eight, beyond.
And I believe he shared a stat that was, I remember the exact number, but it was north of 80%. Of business owners want to adopt AI into their organizations, and I think you and I may have chatted about this on the program before it’s rare that there is a solution that high percentage of business owners say [00:07:00] they want to adopt.
So obviously there’s a desire, there’s a, there’s an audience that’s ready. And so this VC a IO designation could be a distinguishing factor and a differentiator for MSPs that can craft a practice around it. The way that, you’ve just been talking about going in and, assessing a client’s readiness.
AI establishing the governance around it, the security. And again, I think we’ve also talked about using AI as a pull through for cybersecurity services in the past as well. So it’s almost like a, a one-two punch business is one ai MSPs want to deliver more unique, valuable services that take them out of the server room and into the boardroom, like you were just describing.
And then MSPs need clients to subscribe to their higher level of cybersecurity portfolio services because, risk, [00:08:00] right?
Rich: And a big piece of the specific opportunity we’re talking about here is that ability to communicate at a very senior level with the end user executive. And the encouraging thing there, I would say is, we’re not necessarily talking about transforming your business and spending enormous amounts of money higher.
It could be one hire, one person who understands technology, but is first and foremost a business-minded consulting business, process optimization kind. The person who can go into the boardroom with you and have that kind. It might be just that simple. But if you have that skill, yeah it, this is not only a great way to grow the business, as you’re saying, Erick, but it’s also a way potentially, if this is of interest to you, to move up the ladder a little bit into larger organizations where they are looking for somebody to come in and they may be not ready.
50% of the companies OpenText survey said they, they have or are hiring a chief AI officer. The other [00:09:00] half might be very interested in having a virtual one if there was somebody out there who could actually do that work. And if you’re that person you’re gonna have an edge on your competition.
Erick: Agreed.
Rich: We talked about we started out with the the Vcso role and having the ability to convince your customers to make the investments that they need in security. And this connects somewhat Erick to your tip of the.
Erick: You bet, rich. I wanna talk a little bit about that need, going back to that need that MSPs have to get all of their clients to subscribe to their enhanced cybersecurity portfolio of services.
And we’ve talked about this a lot too on the show. Rich and I speak to many MSPs and the ones that are leading the charge have figured out how to present the need for clients to subscribe to these enhanced services without selling [00:10:00] cybersecurity. So the first thing that I wanna say, tip number one is stop selling cybersecurity to your clients.
There’s a a need, a business need for clients to strengthen their cybersecurity posture. It is not to line your pockets, although if you do it well and bundle and price your services effectively, you’re going to make profit margin on those services. But what you’re doing is you are reducing the risk for the client, their staff, their customers, and your organization, and by extension all of your other clients, rich.
So think about this, if you get 95%, let’s say 99% of your clients as an MSP to subscribe to your enhanced cybersecurity services, even if that 1% signs a waiver, right? Releasing you of any liability for them not signing up [00:11:00] when they get breached, I, I said When Rich I have, when they get breached or they have a cyber incident and they reach out to the MSP for help.
What do you think the MSPs do? Rich? Do you think they let ’em twist in the wind or do you think they come in and try to save them? They come in and try to save them? I’ve asked this question in many live sessions and many presentations and by and far MSPs say, no, we will help that customers. So now we are going to stop what we’re doing for all of our paying clients that haven’t been breached, and we’re gonna focus on saving this particular client rich and hope that there’s some budget or some funds to pay us.
This gets really complicated, rich, because once there’s a breach, then typically the insurance company gets involved, attorneys get involved, and they may not want the MSP [00:12:00] to do anything. So this is bad for the MSP, it’s bad for the client ’cause they’ve gotta sit there and wait for a decision by someone that doesn’t do this for a living to come in and decide how we’re going to address this.
So I could go on and on, right? There’s nothing good that comes from a client saying no. Even if they’ve signed your release of liability waiver, they’re still down and you’re involved in some form or fashion no matter what. And then if you do get to save them, you’re gonna be challenged in getting that client to pay that lofty bill because you’re gonna charge them.
And if it’s a weekend or a holiday weekend, imagine what that rate looks like, rich. So let’s have a conversation with every one of our clients and not make it awkward. My second tip is, it’s just a conversation where you express the risk and you express and you share the options, right? This is, we’re working together to guard against these threat actors.
Here are three [00:13:00] options. I like good, better, best, rich. So here are three options that we need you to choose from before this date in time. Set a date in time. The third tip where if your clients do not sign up for your minimum, good, better, best, good offer. And this is the offer that every one of your clients and new prospects need to subscribe to Rich in order to become or remain your client.
If your clients don’t subscribe to at least your good package by this date and time, you adjust that date based upon how much risk there is right then you will automatically opt them in through that lower tier that your minimum tier of service. And this is an ask forgiveness us later, not permission first a thing, rich.
So you will be automatically opted in and you will see this reflected on your next invoice. Rich when we do it right, [00:14:00] a small single digit percent of clients may complain. And then you’ve gotta make a decision as an MSP Rich, do you remain with my client or do you, do we exit you and you find another provider?
Because the uplift of revenue of profit in on that revenue more than should, more than compensate you for losing one or two CD or F customers. So think about this from a risk perspective and ask yourself, MSPs, are you willing to risk your business because one of your clients is not an A or B client and not strategic enough to take your advice to protect themselves?
You can’t save someone that does not wanna be saved, right?
Rich: And I think you you have answered the very difficult for a lot of understandably difficult question for a lot of MSPs at the end there. You opt the client [00:15:00] into at least the minimum package if they push back, what do you do with that?
Do you or do you not fire that client? And I believe you’re saying yes, you do. ’cause it’s just not a smart business decision for you to retain that client. And this is a question I flag that, ’cause it’s a question a lot of MSPs ask, but I think your advice is very sound and it’s a difficult choice to make.
But I think it’s a really smart one. The other thing that this reminds me of a little bit Arab a little more broadly is a kind of mindset that I encounter sometimes in particularly successful MSPs. And I don’t wanna misra this exactly, but when they come to the client, it’s not like I’m pleading with you to do these things that I believe I you that you need to do.
You hired me. Because you wanted somebody to do a really good job of providing proactive IT services for your businesses. I know how to do that. That’s the mission I’ve signed [00:16:00] up to do. And that you’re, and so it’s not, do you not implement at least the minimum cybersecurity package or what I’ve heard in other instances, do you or do you not swap out your firewalls for the ones that my company has standardized on, or the backup solution, or, it, this is how we do things here at this company, and that’s why our clients love us so much and that’s why we’re gonna do a bang up jo.
So we’re not negotiating about this stuff. You’re not, giving the client an ultimatum, you’re not making them feel cornered or ordered around or whatever, but it, they sign the deal. Come in, do a great job for me. Here’s what that entails. And a piece of that is that at a minimum.
You’re gonna have this set of cybersecurity tools and it’s gonna keep you and your data and your customers safe.
Erick: Absolutely rich. And here’s one thing that I’ll add, and this is an extra bonus, right? Make certain that your good offer and some of some MSPs have one, one offer. What makes sure if it’s good, [00:17:00] better, best, or if you’re selling one kind of bespoke or best of breed solution and that you want every client to subscribe, to, make sure that the cybersecurity component of that offer meets the minimum requirements of the client’s cyber insurance policy.
Sometimes that’s the lever that ultimately gets clients to say yes, because you say, Hey, let’s take a look at your cyber insurance policy. You don’t meet any of these requirements. We may be doing one or two of these things, maybe, but can you imagine the worst thing that could happen if you were.
Ransomed or if you didn’t have access to your client’s data or they’re, threatening to release this data, which, you know, double, double jeopardy. Sometimes they take the payment and release it anyway nowadays. Rich. So sometimes using that as the impetus the compelling reason to get clients to say yes and our, this is what we’re doing is we’re aligning with your cyber insurance requirements so that if you do happen to have a [00:18:00] really bad day, you can reach out and hopefully file a claim and not get it denied.
And then, sp statistics about how many cyber insurance claims get denied. It’s higher than zero, rich, much higher.
Rich: And oh, by the way you don’t have cyber insurance as a lot of businesses still don’t. Let’s talk about that. But that is a conversation for a different time on the MSP Chat podcast folks.
We’re Erick and I are about to take a quick break. When we come back, we’ll be joined by Joel Abramson and Mark Scott from Top Down Ventures. They’ll both tell you a little bit about their backgrounds themselves in a moment. I think of them both as managed services royalty. They go back to the very earliest days, just like Erick.
These days, they are investors investing in vendors who sell to MSPs. They have an investor’s point of view on the managed services market right now. And that is not one that we get to hear from directly from the investors very often. [00:19:00] You’ll get to hear that perspective in just a moment after the break.
Stick around folks. We’re coming right back
and welcome back to part two of this episode of the MSP Chat podcast, our spotlight interview segment where we are pleased to be joined by not one, but two people. We do a lot of interviews with vendor executives on this show. We are pleased to do a lot of interviews with MSPs on this show.
I don’t believe at any point in the past if we actually had an investor in this industry on the program with us. And we’ve got two with us right now. They’re Joel Abramson and Mark Scott. They are both managing partners at Top Down Ventures. Gentlemen, welcome to the show. Hey
Joel: guys, how you doing?
Great to be here.
Rich: For folks who are not familiar with you or top down Joel, I’ll start with you. Tell folks a little bit about yourself, what you’re doing now. Also a little bit about your background, which I think will be helpful, and then give people a quick little primer on top-down ventures.[00:20:00]
Joel: Absolutely. So for most of my career I’ve had the fortunate situation of being in between Chris Day, the founder of IT Glue, and Mark Scott, the founder of Enable. And two legends in the MSP space and together we had fully managed Canada’s largest MSP that we grew very intentionally to a hundred million in revenue.
And then sold that to Telus Canada’s largest telco in 2022. But along the way, obviously Mark had started and sold Enable, and Chris had started and sold it Glue and since 2018, I was helping Chris at Top Down Ventures, which was his investment arm supporting early stage software companies in the MSP space, and he incubated out of that companies like Quota Backup, radar Control Map, and most notably Scale padd, which is now grown to be larger than IT Glue was Chris has stepped back in as CEO of Scale padd and we’ve.
Together with Bark Evolve top down to now [00:21:00] be a an industry first venture fund focused entirely on early stage MSP software companies. And so top down founders one has been in market for just just under a year. We’ve had incredible success bringing together the investor community from both inside the MSP ecosystem and some capital from outside.
So we’re about 20 million and with a target of 40 million in the fund, and we’ve made our first six investments. And so we’re just thrilled at the reception from the industry itself but also the momentum that we’ve been able to gain on both the investor and investment side.
Rich: And now, mark, Joel has told a little bit of your story, but I’ll give you a chance too to tell folks in the audience a little bit about yourself.
Mark: As Joel mentioned I guess my first segue into the managed services space was co-founding. And co-founding enabled technologies back in 2000 with Gavin Garbe. And yeah I was the CEO of that for a number of years and then basically left there before we sold it to actually [00:22:00] SolarWinds and started an MSP that, as Joel mentioned, e eventually merged with Chris’s MSP to form fully managed.
And then we built that up. But built that up, over, over several years. And then ultimately got in a position basically around that 20 20, 20 19, 20 20, right around actually when the pandemic and got in a position that, we looked at some different alternatives, I guess strategic alternatives for the business and ultimately ended up selling to Telus.
Then as Joel mentioned we I stayed with that asset basically for Telus, helping run it for a couple of years. And then what we basically decided is, let’s take all of our domain expertise and connections in the in the MSP space and really pro more, more professionalized early stage investing for MSP software companies.
And really those early stage [00:23:00] ones, taking them through the, million in a RR stage to north of 10 million till you’re obviously get, go going to the next stage of investor at that stage. So again, we’ve been been pretty excited about again, how we’ve been received across the industry and definitely look forward to continuing to build on what we’ve done here the last couple of years.
Rich: Now, before we dive further in, I wanna also give you a quick chance to tell folks about your blog and podcast. ’cause a big part of why you’re here is I’m a huge fan of both the blog in particular, it’s called MSP Outliers, te Tell folks a little bit about it.
Mark: Sure. Probably the world doesn’t need another MSP event and the world doesn’t need another MSP podcast that’s talking about the same old stuff, operational maturity and those sorts of things.
So what we decided to do. Is really focus on telling the story more in, in the lens to the investment community. So whether you’re a family office [00:24:00] investor right up to PE investors and obviously right up to Wall Street as well. We definitely wanna raise the flag more from the investor perspective by and what we thought was to keep it more topical, basically every Thur, so e every Thursday we do something.
So we announce, the podcast of that month. The fir the first week, the second week we send out the blog the third week. We obviously bring in the guests in a format like this, two guests with again sections to it. And then the fourth week do a roundup.
So yeah we definitely definitely had very good feedback from it so far, and we’re gonna continue to build upon what we’ve done. So being not why we picked that format is to make it very topical for in the month with guests that kind of align pretty well to that. And definitely appreciate appreciate that you guys you guys know the amount of work that you that it takes to go [00:25:00] into something like this, right?
So it, it’s nice that that you guys enjoy the work that we’re doing there.
Joel: Bridge. I might just say, one of the I get to be in this fortunate position of meeting with Mark and Chris every week and every one of those one-on-one sessions, I get something more than I brought in.
And so whether that’s an enhanced strategy or a new outlook, or just a totally, I was looking at things upside down, and I’ve had the privilege of doing that since 2018 with Mark and since 2012 with Chris. And this is now finally a platform for them to share. Some of you know that with the world, because these guys are transformational thinkers and it’s cool to see that coming out into the world through the blog and through the podcast.
The, what I’ve been been able to what I’ve been exposed to firsthand for many years now.
Mark: Joel really undersells himself. He runs the show, guys.
Rich: We will link to both. We will link to both the blog and the podcast in the show notes for this episode so folks can go out and enjoy the content as much as Erick and I do.
Maybe just [00:26:00] set the stage guys the most of the audiences, MSPs, they know what the managed services landscape looks like from an MSP point of view. It’s rare that we get a chance to look at the landscape through the eyes of an investor and therefore by extension a vendor.
’cause you work very closely with a number of vendors. What does the landscape out there right now look like from your perspective?
Joel: I might I’ll jump in here. Start this mark. So by landscape, what I really see is, we’ve been first, oh.
All right. We’ve been firsthand witnesses to this transformation over the last kind of decade of MSPs doing their thing evolving from break fix to managed providers and and then starting to aggregate. So we set out on this plan to bring together MSPs and scale out across both verticals and geographies.
And [00:27:00] when we were, telling our story in 20 19, 20 20 it was a very different time. Most folks didn’t understand what an MSP was when we started to meet with them and tell our story. Now it’s totally different. You see some of these big aggregators form billion dollar MSPs come together and they really have a place in in the world of investment because so many private equity firms, family offices, have decided to lean in and take their piece of the pie in the managed service space.
On the vendor side, there’s been really strong demand for MSP platforms for quite a while now. It started with Tomo Brava coming in and investing in ConnectWise, and then it’s compounded out with Insight and K say, and General Atlantic and their portfolio of investments. And so there’s been a huge amount of capital put into these companies when they get to a certain scale.
And so you have now big MSPs, you have big Ms P platforms that support those MSPs. And so you start to think about, okay, what’s next? What happens when an [00:28:00] industry gets to that maturity point where you have, such a large amount of aggregation that’s happened on the service provider side and and on the platform side.
And so we just looked and saw there was a ton of great innovation happening at the early stage before, you had. MSPs trying out enterprise technology and maybe trying to retrofit it to their practice. But then ultimately, that not working out very well. And so then they defaulted to the technologies that were purpose built.
But now you have this incredible innovation cycle happening at the early stage as more and more companies start to serve MSPs as their primary customers versus just a secondary or tertiary part of their strategy. And so then there is some there’s growth capital available when these companies get to 10 million, so they can take them on the next phase of that journey.
But the early stage was so underserved and so that, that’s why we started the fund was to bring capital to that, around that first million of a RR and there’s. Generally in B2B SaaS, there’s a lot of early stage [00:29:00] capital that comes into these these type of companies.
But in the MSP industry, I think because it was relatively unknown at the highest level, the venture side actually wasn’t paying much attention to it. And so not only did we wanna serve that and, bring some of the what we consider new capital into the early stage, but also because of the wealth that had been created in the MSP space.
And by wealth, I, it doesn’t have to be Mark Zuckerberg Wealth, it could just be I have a really successful SP and I’d like to invest, a couple hundred thousand dollars back into the next generation of software companies. We’ve created that vehicle to enable that.
Erick: So team, in your August blog, you post that cybersecurity may be the key to evolving MSP from Main Street. Wall Street. Can you unpack for us from your perspective, why the MSP market hasn’t yet caught on with Wall Street and [00:30:00] why security could change that?
Mark: Yeah, I, I can hopefully handle that one, Joel.
Yeah, I think if you just look at overall, I guess the history of managed services and we wrote a blog back in the blog and podcast, I believe back in June. Was, covered more of this topic in a lot of depth of, as much as the industry has grown, as much as excited we are as about it we really haven’t seen the success at the public market level from either the software platforms or even one of the large roll-ups, as an example.
Eventually going out public. In fact in that case there’s been none. But in the case of software vendors, we’ve had Datto that went public a number of years ago and then obviously went private after the sale to Kaseya. And then we’ve had enable over the years that [00:31:00] spun out of the SolarWinds among public.
I think that what’s interesting and John pka, the CEO of Enable was on our podcast last week really talking about, when he first was trying to tell the story to Wall Street. He go in. To a room full of analysts and ask people, does anybody know what an MSP is? And basically one hand would go up.
Today he said, if you, if he does that same question to the crowd maybe one hand doesn’t go up every most of the hands do. So I think it’s just been this evolution of educating slowly but surely, educating Wall Street. And John made another really insightful point as well last week.
He said, what’s interesting about Wall Street, they think in silos and Main Street and really SMB and MSPs think horizontally in terms of from a solution perspective. So that’s why you’ve seen enable start to. [00:32:00] I wouldn’t call it a pivot, but evolve over time to really be more in the cyber lane, right?
If you really look at who are some of the big dogs in the, in from a public perspective, you have CrowdStrike and Palo Alto and Zscaler to name three. It’s a very well defined, covered by analysts, Jim Kramer talks about it et cetera, et cetera, right? So versus MSP is just this, this obscure term to some degree at least at this stage. So we really feel and so again we’re at, in, in this age of what are the two biggest technology drivers that are out there. It’s obviously AI is one, but definitely cyber cybersecurity, we feel is the gateway to AI adoption, right?
If you don’t, if you don’t have a great cyber posture as a small business, as a medium sized business, as a large business, probably a AI adoption and rolling that out across your organization [00:33:00] may not be the best move. So this whole idea of cyber resilience, and I think we’ve all in the MSP industry invested a lot in in cybersecurity and information security over a number of years.
And I think we’re seeing better programming as well. So better training. More certification around, people that are giving vcso services, those sorts of things. So we, we really feel that cyber is already an established silo from a standpoint from Wall Street. We could see again, some of the pure play cyber platforms, or even if you look at the bigger RMM vendors, they’re all half security companies anyways, if you look at most of the technology that they’ve built or acquired and integrated into their platforms over the last number of years.
So we really feel that is gonna be something that we feel some of the bigger platforms could probably lead with to tell their story. [00:34:00] To Wall Street if and when the markets are ready to take on those types of companies, which I think is really important overall for the industry that we have large, successful ServiceNow like businesses in the MSP space.
And then to flip it over real quick to the service provider side we feel that’s another area as well that has to be tackled. ’cause we can’t really leave those large, companies as they, as they go north of a billion in revenue, in these evergreen PE funds forever, right?
We’ve gotta hopefully we’re gonna see some success. On that side as well. And then MSSP, we tackle a little bit in the blog and podcast this month in that we really we, we still haven’t seen a ton of big success stories basically in, in pure play MSSP services for the small and medium [00:35:00] sized business.
We think that’s probably an opening for us in the market as well as we go forward, is to help the industry start to create some Herve group type companies within that within that side of things
Rich: too. That’ll be an interesting thing to watch as you pursue that, what you know, what kind of companies you, you look into and what it is about them that you think makes them potentially a good fit for the SMB and a good opportunity to go after that so far, un exploited opportunity.
I wanna thought you were talking a lot more about platform. There was something you said in that same August blog post that Erick was referring to before where you were talking about, a big challenge for investors in security is determining if a startup that you’re assessing is, quote, building a feature, a product, or potentially a platform, which was an interesting way to frame it, but it also, intrigued me in terms of how you guys think about that.
‘Cause clearly Platformization is a huge trend specifically in cybersecurity [00:36:00] right now, and yet you’re, when we’re talking about early stage companies here you almost can’t really be investing in a platform. How do you think about the opportunity for a company that fits into the feature silo or the product silo as a, as opposed to the platform silo and its viability, its place in the market, given how much momentum there seems to be about around platforms
Joel: all years.
Yeah, I yeah. I’d love to jump in here. One of the interesting things about the MSP space I joke that we’ve got a bit of a crystal ball in its enterprise SaaS, and so you can look up market and look at what some of the great leaders in enterprise SaaS have done and then understand what exists in that market today versus what exists in the market or in the product set for SMBs today.
And move Works is a great example. We, and fully managed was actually an unbelievable learning. We kinda learn [00:37:00] learning atmosphere for us because we did have a piece of the practice that was serving the mid-market and, small enterprise. So we had a ServiceNow.
Practice. We acquired a ServiceNow practice. We use that ServiceNow practice to migrate our own ITSM in off of ConnectWise into ServiceNow for the MSP. But in that we also got to work very closely with ServiceNow and, see what products these mid-market and small enterprise customers were consuming.
And one of them was Move Works. Move Works was this phenomenal AI chat bot, let’s call it in the early 2020s that allowed for service automation, level Zero automation. And, lo and behold, five years later, move Works gets acquired by ServiceNow and it’s a, incredibly well penetrated level zero, level one help desk agent inside the enterprise.
That’s a great example of a technology that was founded five years ago, gained broad product market adoption, sold the ServiceNow in a multi-billion dollar transaction, and nobody in [00:38:00] the SMB or MSP space has probably ever looked at or touched or played with woodworks inside ServiceNow platform.
But there’s companies that look a lot like Move Works emerging in the MSP space today. And, the, a type of platform, like a type of product like that can become a platform or part of a larger platform. And for example we’ve looked very closely at some of the platforms or the products in that space that are building for MSP today.
So I know it’s a long-winded way of saying, there is no crystal ball for early stage venture investing, but how do we delineate between a feature, a product or a platform is we can look up market and see what those various trends or preexisting products or platforms or categories look like up there and then start to measure the solutions that are being built for or adopted by MSPs accordingly.
And we’re looking for, we do obviously a bunch of analysis on any company that we’re looking at. We look at the addressable market, who they’re [00:39:00] selling to. Are they selling through what’s the breadth of features that they have today at this early stage? What. What features are the customers attracted to or raving fans of?
And then where can they take this piece of technology to be, a more broad platform? And companies like Syn Net companies, like K say, they have a huge multi-product platform type offering for let’s call it cybersecurity solutions. But like a company in our portfolio, like Threat Mate has a really strong platform potential because they’ve, you’ve taken some of those products and things that, like a casee would do, and integrated it across multiple feature sets to, to allow for the beginnings of a platform.
And that’s why we’re so excited about what they’re doing. And so I love the constant evolution of the technology lifecycle because it’s, it. Forces for innovation at every step, whether it’s AI coming in or new security practices and frameworks coming in all of these [00:40:00] products are forced to evolve.
And those are, it’s helped shape our thinking for the next generation of market leading companies.
Erick: Now, you guys have written before about the renaissance of left of boom security. What’s driving that now and how does that impact MSPs today?
Joel: I think what’s driving it let’s, we don’t have to go back. I’m sure it is present day reality for a lot of MSPs today. But MSPs in general have been the trusted advisor now for a number of years.
And the expectations of them have always been able to take care of everything. It, so they were caught in this tough position where the lack of doing something was all of a sudden, like their fault because the expectation was you did everything. And it’s been a really tough place for MSPs to exist for a very long time with the [00:41:00] expectation that they do everything left of boom.
But, and then they’re, held responsible to, on the right side when the reality is that most of their customers have been studying their own risk tolerance and defining that by the products and services that they consume from their MSP. It’s tough. MSPs are generally small businesses, and they, I remember when fully managed, got to, I think it was about 250 employees, and Mark said to me, we need to hire product management.
We’ve had people managing our vendor selection. We’ve had technology leaders, but we’ve actually never had a dedicated product manager role that sets the pricing and the packages. And their whole role is just to continue to evolve those packages and that offering. But most, most MSPs are not 250 employees.
And by definition, most, as a flow through of that, most MSPs don’t have product management. And so when you think about. All the things an MSP is expected to or trying to [00:42:00] be responsible for left of boom, it’s nearly impossible for them to have every product properly procured, packaged, sold, and then configured to plug all these holes for an event, and then an event happens, and then they need all the right of boom response and how are we gonna deal with this breach?
And and so it’s, as you guys know it’s a very tough job. And so we see, you called it a renaissance. MSPs are getting better and better at selling, at putting their foot down on what their stack should be. Thrive. I think as a scaled company should be, is the market leader by having the majority of their customers if not all of their customers consuming their full security stack.
But I think if MSPs are honest, most of them can’t say that, that they have a complete left of boom security stack, nor that their customers are consuming the whole thing. And so we think that there’s a lot of great things that can happen to help put together [00:43:00] that complete offering left of boom, but then also help MSPs ensure their customers are procuring it.
Rich: Now, you guys might tell me this question we’re about to ask is not really a question worth kind of thinking about at all, but there’s been something on my mind recently that I’m not really. Qualified to answer. I can’t think of anyone better than you guys to just set me straight on this a little bit.
As I read about the venture capital scene right now, what it looks like to me is if you’re doing something in ai, this is a pretty good time to get venture capital funding. Beyond that, the works are still gummed up ever since interest rates went up and, it’s been hard to exit, therefore it’s been hard to raise.
And I’ve just recently started thinking to myself are there vendors out there? Who the folks in our audience rely on for one reason or another who might be approaching a point where they need to raise more money to continue investing in r and [00:44:00] d and growth and so on and might have trouble doing that because they don’t have ai, in their name or whatever.
I, is this something how big a problem potentially is it for an MSP that there, the venture capital market right now is still outside of AI still trying to regain some of the momentum it had before?
Mark: Yeah, I think the, the good news for the MSP space is it’s a pretty industrial strength model, right?
Even in, in bad, good times and bad. Most businesses that are properly run obviously can be as profitable as they wanna be depending how much they’re gonna invest in growth. And I would say that’s, that, that goes the same with the software the successful software companies.
I think there’s something like 13 billion in dry powder private equity looking for investments in the MSP space. So I think for the what you’re, what your [00:45:00] question rich on, is there any of the name players that people would use as some of their key suppliers running out of running outta runway?
Not that we know of that’s for sure. And I think most of those companies. Would be funded anyways by private equity at that stage. It wouldn’t be venture, but going to venture to more early stage. I think that’s the reason we really saw, a big opportunity with Top Down.
And we’re finishing off top fund one. Fund two will be obviously a, probably a 200, $250 million fund, something like that. That’ll come out next year. We see a lot like definitely a void in the early stage in the early stage venture. And yeah, I think you can put AI in your domain or everybody’s got kind of an AI spin.
As a, as an investor, we see a lot of stuff. So we definitely under, we understand what’s something that’s real and [00:46:00] something that isn’t I think we’re way overplaying. Really AI in the MSP space. I think to some degree right now, most MSPs, they’re not using that much AI to automate yet again we’ve got some great companies in areas like, conversational service automation, areas like that.
But I think it’s still very early stages where we’re seeing AI being, broadly applied within within the MSP space. So I think the good news for the MSP space, it is, it’s a pretty solid business model, first and foremost. That and there wouldn’t be as much private equity trying to invest in it if it wasn’t again, I think the big name again the Andersons of the world and obviously all the big.
The big deals that we see out there. I think there is fundamentally the traditional venture capital model is fundamentally broken, right? Like you’ve got, [00:47:00] 10 funds that raise 75% of the funding, right? And do most of the, do most, again, the big ticket ai, unicorn investing and then everybody else deals.
Every, everybody else is dealing with the table scraps basically. So you’re gonna see more funds like us with, again, specific operator knowledge, domain expertise in an industry that has cradle to grave the relationship so that we know when we’re going in, again, to back to a couple of questions ago, looking at a cyber company as an example, a cyber startup.
We don’t wanna invest in something that’s a feature we know, okay. We know four other of the platform companies are building it, have this as a feature or building it soon. But this is a product that is going to, build open APIs and gonna go out and do the partnerships with some of the larger platforms.
So at the end of the rainbow. [00:48:00] We have, a potential exit strategy for that business. ’cause again, the majority of startup companies, as they become successful the most successful ones, they get sold for under $200 million. So you’re looking at, most you companies in software would get would get sold at either, either to a majority situation, to a PE investor, or actually bought by a larger software company.
And they’re go, they’re gonna be in that range. As you start to go over 200 million the buyer landscape, the investor landscape gets a lot smaller as well. Yeah, I think fundamentally the traditional venture capital model has a lot of issues with it, and there’s a lot of fun.
There are a lot of funds running outta money, let alone let alone their portfolio companies, right? But I think it would be good shape in MSP.
Joel: Yeah, that’s exactly Mark. I think you’re bang on. There’s been no period of time that MSP [00:49:00] industry has had more capital di directed toward it.
So this, the audience of this podcast is the MSP industry. We’re in great shape. We’ve got new venture capital funds like us coming in. Yeah. If the companies that have, potentially raised money and are running outta money, they’re probably because they’ve not found product market fit yet.
And they’re either going to extend or they’re gonna die, and of course they’re gonna die. There’s venture companies that don’t get to exist because they haven’t built the right products to serve the market. But in general, there’s never been more capital in the space, which is a very good thing for MSPs themselves and for, that symbiotic relationship with the MSP vendors in driving innovation and new platforms coming coming forward and, pushing the future of the industry.
Look we invested in Slide because we think what Austin is doing is phenomenal. I don’t think, Draper is gonna invest in a backup [00:50:00] and disaster recovery hardware company. They’re just not, they’re trying to find the next TikTok. They’re not trying to find the next datto because they were never invested in Datto in the first place.
And but we did because you could talk to every single one of our LPs and they’re all thrilled about our ability to partner with Austin on Slide because we all know that’s a phenomenal company that’s being built right now.
Erick: This is such a fascinating conversation, Joel and Mark.
And it’s taking, I think the what MSP should be thinking about to a whole new level in terms of, things like, being attracted to maybe some of these new vendors that are coming into the market. We’re seeing them all the time. Cybersecurity, ai, a lot of startups. So can you share from your perspective what MSPs should be thinking about from a maturity level of a new vendor, and especially the financial [00:51:00] stability of that vendor?
What questions should they be asking? What should they be considering when they’re thinking about partnering with them? Because, as a former MSP, like you guys. I get attracted to the bright, shiny object too. But at some point, reality has to set in and we have to be able to make business decisions on what time, energy and resources we invest in a new vendor relationship so that we don’t regret it later.
What can you share?
Joel: I might, I can start. Mark, you please. Please top off. The reason that slide is so successful out the gate is because Austin got up there and said, guess what? We’re building a company that, is laser focused on innovation. It’s laser focused on customer support, and we know that you need to serve the needs of BCDR with your customers today, and we’re going to continue to support that.
And so that was really easy for MSPs, or it is easy for MSPs to say, yeah I know and I trust and I believe, and I’m willing to get on board with [00:52:00] that. But I’ll tell you top down is trying to earn and maintain the reputation that our portfolio companies are few C top down invested in a company.
You can believe that they are committed to innovation, that they’re committed to pure learning, that they’re committed to putting MSPs first. That is what we’re trying to do is identify those leaders, put them together with the other leaders in our portfolio, and make sure that we’re focused on the best possible outcomes for the MSPs today and in the future.
You know that’s us. There’s a lot of, like you said new entrance into the market entrance from that don’t have the trust and credibility of an Austin recor that are selling the next shiny object. And what do you look for in that? You can look under the covers and make sure that the development is sound.
You can look for accreditations like that. They’re soc two. You can look for strong investors, whether that’s top down or other great, VCs that are starting to come and invest in the space. But I, I think just generally, [00:53:00] MSPs. Do they have the time to go that deep on every vendor that they’re looking at, or should they be focused, like we were talking about earlier on, developing a full, comprehensive stack of left of boom security objects to ensure that they’re protected and the product management around that and their own services.
And, so MSPs like, like we said earlier, it’s a tough business. And there’s a lot of great products and vendors coming up ev every show or every month. And there’s, there’s some critical things that you can look at along the way. But yeah hopefully top down is making it easy for people to select the right group of products if they see that we’re supporting them from either the investment side or just even, at our events and how we’re out there in the market integrations, like with a company like Scale, padd, things like that.
Rich: As you said just moments ago, Joel the Austin who has come up a few times in the past few minutes is Austin McCord for the three people in our audience who don’t know who Austin McCord is. He is what founder or co-founder of Datto I mean [00:54:00] somebody who’s very familiar in the MSP world.
And slide is the new venture that he’s working on right now. We actually spoke about their MCP interface on this podcast within the last few episodes. And folks who are curious to learn more about what we’re talking about can go to slide tech if I’m not mistake. And I think that’s the URL we were talking about security startups before, and this whole question, is it a product?
Is it a platform, is it a feature? Different, but I guess somewhat related question in the realm of ai, because I keep coming across now these very interesting young startups. That are using AI in very sophisticated ways to automate the work that MSPs do. And it reminds me a little bit of a few years back when it was startups, young, interesting startups that were getting into cloud management.
Before the big company R-M-M-P-S-A companies did and then eventually the big R-M-P-S-A companies did. I [00:55:00] assume sooner or later you’ll see the ConnectWise as Kase and enables of the world’s start to incorporate some of the technology that these young, nimble AI startups are building for MSPs and help desk.
And I’m just wondering from an m MSP standpoint what would you advise though? I’m thinking about, investing, not like literally placing an investment, but purchasing and putting time and effort into deploying and training up my people and so on in this new tool that does something that sounds really great, but I don’t know if it’s gonna, how long the future of this particular company or startups like it is.
Do I, it, it sounds a little similar to what you had to say about security startups before, but what would you advise people.
Mark: I think it’s definitely who’s backing them, right? Because I, and again we just invested in one. It hasn’t been announced it hasn’t been announced globally yet, but it should be in, in the next couple of weeks here.
I, I believe definitely do your homework [00:56:00] on who’s the CEO, who are the players internally who are who are, like, just what Joel was just covering, right? Is it Bei Capital backing it? Is it us? Is it a number of other you know, investor? The good thing about the m MSP space, it’s now mature enough that there is a lot of people that have had exits.
And again we’re seeing, early stage investing being more professionalized through organizations such as us. So I would, just do your homework, figure out who. You, who’s, who they’re backing, and then what’s the solution that they’re trying to solve? Is it a CSA situation on the ConnectWise?
The that, that’s on the ConnectWise platform. Talk to the ConnectWise guys and they’ll be able to let you know as an MSP, like how deep the integration or conversations are. And I think that’s just the bigger platforms, they don’t have enough time and energy to build every [00:57:00] widget that’s out there.
They’re definitely evaluating all the time who’s out there in AI or cyber or, cloud automation or whatever it may be. So I would just say, do your homework. A, does the sol does the solution fit what your kind of use case is? What you wanna do with it? Are they soc to again, ob all the typical diligence that you have to do around a software vendor.
And then who are the players that are backing them and who have they talked to? Because, obvi obviously back to this, is it a feature a product or a platform? If you’ve determined this is a great product that’s gonna fit in our tech stack today, where is it gonna be, two or three years from now?
Down the road? And so obviously you gotta figure out though, if you’re running auto task and this is a solution that, that fits better into the ConnectWise technology ecosystem, then maybe there’s another one that you can look at kind of thing, right? [00:58:00]
Joel: Yeah I would say you want your vendors to be successful because when they’re successful, that means that they can reinvest back into innovation.
They can build out their customer success teams, they can hire great talent. And if it’s looking like the vendor that you’re looking at has been small for a very long time. They haven’t broke through, they don’t have a great team. They’re constantly like, turning people over.
That’s, it may be, a number of things, but the ones that are, growing and exciting and they’ve got great talent and people are showing up and they’re, the features that they’re building are truly innovative and they’ve got strong founders that either come from outside the MSP space or maybe, it’s their second time or third time inside the MSP space, but they built phenomenal products.
That’s the companies we look for and that’s the companies we encourage MSPs to look at, at buying the same attributes, right? If you meet a great founder who’s really, like his think if they’re thinking is truly. Something where that is inspiring to you and you watch what they’re doing and you’re, you’re excited about the journey then [00:59:00] enjoy the journey.
That’s, that’s, it’s, that’s a lot of the similar, I’d say, principles that apply for investing, apply for consuming those products as well. The reality is that things don’t stay the same. And you watch companies like Halo, you watch companies like Ninja come and be these big, important players in the MSP space in, half a decade.
And you know that the next ones around AI and automation are just getting started right now. And sometimes when you meet a founder or hear a pitch or start to look at a company or just, you just feel it like, oh, I know that this is gonna be part of the future of the MSP industry. And I would say don’t be afraid as an MSP to start the journey with one of those early stage companies, because they might just be the next really.
Transformative company in the space that you can have been a part of that journey because as a, as, likely your business will grow as they grow. If you’re a part of a, transformative technology especially in this agentic service era.
Erick: Joel, [01:00:00] I love how you invite everyone to join the journey.
I think that’s a very that’s a very cool phrase. We’re gonna steal it if that’s okay with you, Uhhuh, but hey, you, it’s fun. It’s fun, it’s great. Hey, we’re all going this way. Come on. Your recent blog post hints at what your September post will be about, which is the impact of AI on MSP tools.
Since we’re talking about AI now tell us what coming. Your crystal ball for hyper automation. SMBs AI readiness. We know that a very high percentage of SMB business owners say that they want to engage with ai and the whole digital labor landscape and what that means, or MSPs.
Joel: Yeah look first of all, we gotta understand what’s going on in all these environments, right? I think that. Like supremely underutilized technology out there [01:01:00] in the broad SMB space, specifically through MSPs, is understanding SaaS utilization, whether it be from a license reconciliation standpoint or just from a generally, like what are people using what do, how are people spending their day?
In what applications doing what what is the persistent persistence of shadow IT and people doing things on their own. And a whole other layer just got created around, around shadow AI and how people are leveraging AI in unauthorized use cases. I say unauthorized, but most wouldn’t have an AI exceptable use policy anyway.
And so it’s, really starts there. The, that, that is just the low hanging fruit to just understand what’s going on in the digital work environment, both inside your s, your MSP and inside your customers and helping them gain visibility into that. We see portfolio Company Produce eight doing a lot of great work in that space, as we have seen with more on the security side, like a SA alerts and a SaaS, [01:02:00] Leo and some of the previous companies around that space.
And then, we’re continuing the evolution as MSPs around how do we talk to our customers and scale pad’s doing a great job with their new LMX release that comes out tomorrow around having those conversations and, run QBR and the, really just, continuing the plight of moving MSPs from the server room to the boardroom.
And then when we start to think about AI and the impact on MSPs and their customers you have some really great companies that have come to market. What Vince Kent’s doing over at Synth and basically taking all the models and allowing for MSPs to provide their customers with a GPT like interface and connecting all their data.
It’s huge. Still very early for what SMBs can apply the AI technology for. And then you have companies like Thread that have existed for a few years around the conversational service automation and just trying to take, meet MSP’s customers where they’re at with how they interact on issues.
Getting the conversation [01:03:00] into teams was the first step. And that was, remember how that company started to be built and then now it’s evolved to be, some of the automated service interactions. But then while they’ve been doing that, other companies have popped up that have mastered the automated service interactions, like a move works, who I mentioned earlier, did for the enterprise.
And they’re able to just tackle a bunch of level one issues and they’ve solved it properly with the right amount of depth where it can be trusted and put into a live customer environment. Because ultimately as an industry, we have to never tick our eyes off. The fact that we’re associated with some sort of value from our customers.
And the moment that we try and automate or AI that away, we put the value or perceived value that we provide at risk. And so if the number one things MSP’s customers value MSPs for is when shit hits the fan, I can call Jim and get help and we’ve [01:04:00] all of a sudden put an agent now that’s called Jim.
We’ve broken that that maybe it’s a low value interaction as far as. The grand scheme of everything an MSP does seems, but it could be the most critical piece for those customers. And we, you can’t break the whole model by trying to automate everything out of it. And so this is why it’s an evolution.
And we can’t, we can’t even Mark can’t put a blog forward next month and say, this is the answer for where AI is going to, go in the Ms P space. But we’re learning more each and every month about around what products, MSPs what they want from these products, what they want from these platforms, what they’re willing to give up, what their customers are willing to automate.
And we’ll continue to iterate that throughout throughout the journey as these technologies continue to evolve. But the answer is not a light switch for us to flip to tomorrow. And all of a sudden gross margins go up by 10% and everybody’s just making more money because of AI in the MSP space.
Sure, that could be an eventual outcome, but we can’t. Dismiss the value that [01:05:00] we create and then all the shortfalls that need to be fixed along that, the journey for the industry that is still relatively immature despite all the incredible companies and platforms and risk mitigation and evolution of the industry over the last 25 years.
There,
Rich: there’s an entire follow-up conversation for us to have someday about that last issue you were talking about there, Joel. What an MSP should or shouldn’t automate. The, there’s one list of things you can automate with ai and there’s maybe a different list of what you should automate without breaking what made you, it’s very interesting topic of conversation.
And I’ll also say, putting on my journalist hat for a moment here, I’m very intrigued to find out what this AI company you guys have invested in is. I guess I don’t have all that much longer to wait before I find out. But keep in touch. I’ll be curious to know what that’s about. In the meantime, for the people in our audience here who wanna get in touch with one of you wanna learn more about top down, where should they go?
Joel: I’d like to think [01:06:00] we’re pretty accessible. [email protected], market top down.com. Invite everybody to come into our monthly podcast or subscribe to the newsletter or even just reach out if you wanna learn more about. What we’re doing, the portfolio companies that we have today, what we’re excited about in the future, or even just like what is venture capital?
When we started out this journey, we were committed to, to use the, catchphrase, build this out loud. And so a lot of our LPs have just been along this journey with us as we figure out, all the steps that we need to do to set the fund up and then bring capital together and deploy that capital and what the hold period looks like, and the returns analysis and all this stuff.
It’s been such an incredible experience for the three of us, plus the extended team in building this fund and putting it together and having our LPs come along on the journey with us, having our portfolio companies believe that we’re gonna put this together and then come along on the journey with us.
So we’re happy to host those conversations anytime both in this public [01:07:00] format and at one, one-to-ones or in person at events and things like that.
Rich: Super interesting conversation. I really appreciate both of you making time for us here. Folks, Erick and I are gonna take a quick break right now when we come back on the other side.
We’ll share some final thoughts about this conversation with Joel Abramson and Mark Scott from Top Down Ventures. Have a little fun wrap up the show. Stick around. We will be right back
and welcome back to part three of this episode of the MSP Chat podcast. And one final thank you to Joel Abramson and Mark Scott from Top Down Ventures. Very interesting conversation. Very interesting take on the industry and opportunities for vendors and MSPs. There, right now the thing that, there’s a lot actually that we could probably dive into here, but the thing that I keep chewing on a little bit is that framing that they use very early in the conversation of it is this a feature or product or a [01:08:00] platform, right?
And you totally understand how an investor needs to look at any vendor in, in that particular way. They need to understand what they are buying or buying a piece of if they make an investment in that company. But it occurs to me, that’s actually a very in useful question for MSPs to ask as well, am I buying a feature or product or a platform?
Because you. Just my take. I’m curious for yours, you probably don’t wanna be adding another vendor and another bill if it’s really just a feature. Given that there are probably going to be products that have that feature or we’ll soon have that feature. And then there’s a whole bigger conversation that we don’t have time for right now, but that we’ve spoken about on the show before about this concept, especially in security of platforms, security and managed services.
That the Kase and Connect wises and enables of the world have platforms that provide a lot of functions. May not be best of breed in each one of those functions, but there are. Certainly some [01:09:00] efficiencies that that are made possible by buying into a platform as opposed to a product.
Feature product platform, a good question for MSPs to ask as they evaluate vendors themselves and just decide what, which of those fits best into my business, my strategy, my future.
Erick: Yeah. I picked up on, on the same thing as well as other things, rich, but yeah, we could go a long time just talking about some of the, interesting conversation that that we had.
I think that MSPs now can consider that as part of their scorecard when they’re evaluating vendors, because the thing that struck me was in the same vein that struck you, but it was more about, how is that vendor funded? So if I’m scorecarding, which vendor I wanna maybe trial or adopt or participate in their program with.
Funding is an important factor. And if [01:10:00] we’ve got folks, that are investing in that vendor, then they’re seeing things from a completely different lens than an MSP might see as well. So I think that, if we’re looking at, two competing vendors and one is bootstrapped and the other one has got, rounds of funding behind them that would skew a little bit of extra points in their favor, in my assessment because I can, I feel like there’s less risk moving forward.
Like they’re funded, they’re willing, they’re, they have a capacity to grow and expand and like you said is it a feature, a platform or product? But they can add, they can develop the roadmap, is funded. So if I have a feature request or if I engage with them. Hopefully they’ve got, a team that is able to do that without a lot of folks, spinning a lot of plates, a lot of folks wearing a lot of hats.
So I think it would help me make a decision. When everything else is equal, but then we’ve got somebody that’s bootstrapped [01:11:00] versus somebody that’s, attracted the attention of investors and is getting funded and is growing. I think that’s a great factor.
And then on the, feature platform product for MSPs, I would, I think about a little bit differently. Am I buying, so is the client buying a service, a product, or a strategic service like product or reactive? Reactive support or strategic business growth? I think that’s the, just spitballing with you right here.
Just thinking about it is like, how do I differentiate myself on the market? Not a reactive, IT vendor, but a strategic business partner that brings some of the things we talked about in part one, the CSO VC I, VC A IO, wanted to get that right. And meeting these folks in the boardroom and having those, the strategic discussions at that level rather than my point of contact is, the administrative front office person when something’s broken.
Rich: I just wanna quickly [01:12:00] underscore the first point you made there, because every MSP we know inti it’s just in their DNA when evaluating a vendor, are they, SOC two, type two, et cetera. It should be every bit as much in your DNA, just to check on the funding, the ownership and the funding.
It’s not necessarily it isn’t in fact the first and foremost consideration, it’s probably not even in the top three to five, but it is something that you need to check on and, like you said, factor into the decision making process to minimize your risk. Yeah. Alright, with that folks, we have time for just one last thing and I’ll say right up front, this is maybe not the perfect story for a podcast hosted by two dudes.
I, I, it the women in our audience might have a slightly different perspective on this. And I don’t know whether this is a story where I should be applauding somebody’s grit. Or is this a little bit over the top? I’m not a hundred percent sure, but this story concerns a 31-year-old strategy consultant in New York [01:13:00] who was ready to tie the knot with her boyfriend, who was also ready to tie the knot.
But she told him we’re not getting engaged until, so she wanted to make her own engagement ring and she wanted it to feature a an ethically sourced diamond. She didn’t wanna get a diamond that might be compromised from where it was mined. And so she essentially wanted to find a diamond in the wild and use that.
In the engagement ring, and she would not get engaged until she found a diamond. So by, what did she do? She went to Murphys Murphysboro, I’m sure I’m mispronouncing that, sorry, folks. Arkansas. She went down to crater of Diamonds State Park in Arkansas. Who knew that exists, but she did. And Erick, she spent three weeks, 8:00 AM to 4:00 PM at crater of Diamond State Park with one day off digging four diamonds.
Until by golly, she found herself a 2.3 carat diamond. Whoa. At [01:14:00] cost free. She found it and then she used it to to make the ring.
Erick: Wow. That’s grit and dedication. If I fake, and so flip it in my mind, of course. I’m like, that’s a great tactic for somebody that’s, the bow, in, in the relationship might be a cold feet tactic.
Say, Hey, yeah, it’s great, let’s get married, we’re gonna, we’re gonna have to, mine our own diamond and maybe, they can only do it on the weekend. So it stretches it out until they, I mean, it seems like a lot of hard work, rich, but my mind went the other way.
It’s oh, that’s a stalling tactic where, the guy says, romantically, yes, we’ll find our own diamond. But, secretly it’s oh man, how do I get out of this one?
Rich: You’re probably right. The initial reaction where from her fiance probably was oh yeah.
Is it the, it was right up until she booked a flight to Arkansas. And then he knew, no, this is for real. Congratulations to the two of them. Of course.
Erick: Yeah. And way to save money on, the actual, diamond, which is probably, the costliest part of, a [01:15:00] wedding ring even.
It could probably get a sad 2.5 carats. Holy cow.
Rich: Yeah. And unfortunately, I, the story doesn’t say what that would that diamond, a diamond that big would be worth. But yep. It’s, compared to three week wages, even for a strategy consultant in New York City, it’d be probably pretty good.
Nice. Folks, that is all the time we’ve got for you this week on the MSP Chat podcast. We thank you so much for joining us here on the show. We’re gonna be back in a week with another episode for you. Until then, I will just remind you, as I always do, this is both a video and an audio podcast. So if you’re listening to us right now, but you’d like to check us out on video, go to YouTube, book up MSP chat.
If you are watching us on YouTube, you’re into audio podcasts, go to Google, apple, Spotify, wherever it is to get your podcasts. Look us up there too. You’re gonna find us, and wherever it is you do find us, please subscribe, rate review. It really will help other people discover and enjoy the show. This show is produced by the great Rust Johns.
It is edited by the also great Riley Simpson. [01:16:00] They’re part of the team with us here at Channel Mastered. They are already willing and able to help you create a podcast of your very own and podcast folks. Are merely the tiniest bit of what we do for our clients at Channel Mastered. If you really wanna get the big picture, go to www.channel Mastered.com.
Channel Mastered has a sister organization called MSP Mastered, that’s Erick working one-to-one with MSPs to help them grow and optimize their business. You can learn more about that at www.mspMastered.com. So once again, folks, we thank you for joining us. We’ll see you in a week. Until then, please remember, you can’t spell channel.
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